Startup Deep Dive : Newtrace — how a Bengaluru lab is stripping the membrane out of green hydrogen

In FY25, Newtrace sold ₹3.6 crore of green-hydrogen hardware and lost ₹15.6 crore doing it. That gap is not an accident; it is the deliberate cost of an attempt to rebuild the electrolyser, the machine at the centre of the clean-hydrogen economy, without the expensive polymer membrane that almost every rival still treats as non-negotiable.

The claim that draws investors is blunt: Newtrace says its membrane-free design can produce near-pure hydrogen at up to 60% lower cost than conventional electrolysers, using materials sourced largely inside India. That number is company-stated and still being proven at pilot scale, which is exactly why this is a research bet on a balance sheet, not a growth story. Bharat Petroleum is already piloting one of its stacks; whether the physics survives contact with an industrial plant is the whole question.

Quick facts

What they do

Newtrace designs and builds electrolysers, the machines that split water into hydrogen and oxygen using electricity. When the electricity comes from renewables, the hydrogen is “green” and carbon-free. Newtrace sells its stacks to industrial buyers that want to produce hydrogen on site rather than truck it in, and its early customers are in the oil, gas and heavy-industry sectors. The distinguishing feature is what is missing from the box: the ion-exchange membrane that sits at the heart of conventional PEM and alkaline systems.

• Product line: membrane-free electrolyser stacks, branded around its “Voltagen” electrodes, sized from kilowatts toward megawatts (Inc42, March 2026).
• Buyers: industrial and public-sector energy users; Bharat Petroleum and the ONGC Energy Centre are named early pilot and deployment partners (Inc42, 2024).
• Output quality: the company states its process yields roughly 99.9% pure hydrogen (Inc42, 2024).
• Positioning: on-site industrial hydrogen for refining, ammonia, steel and cement, rather than transport or mobility, which the founders treat as a later market.

The origin

Newtrace was born from a meeting, not a garage. Prasanta Sarkar and Rochan Sinha came together through Entrepreneur First, the international talent programme that pairs would-be founders, at a Bengaluru cohort during the 2020 pandemic period. Both had spent close to a decade studying and working in Europe before returning to India, and both carried the kind of technical training that a hardware-heavy energy problem demands.

Sarkar holds a PhD in fluid mechanics from Université Grenoble Alpes in France; as reported, his father worked at ONGC, and he had grown up around energy, machines and hardware. Sinha is a J.N. Tata fellow whose expertise runs through nanomaterials and electrochemistry, and who had earlier worked on solar-fuel devices during doctoral research in the Netherlands. The founding insight was that the electrolyser had barely changed in structure for decades, and that its most expensive, most import-dependent component, the membrane, might be removable altogether. Their answer was to use the controlled flow of water itself to keep the hydrogen and oxygen streams apart, doing the job the membrane used to do. Rajan Anandan of Peak XV has said that only a handful of companies in the world offer anything like this technology, which is the sort of statement that either ages very well or not at all.

The struggle years

Deep-tech hardware punishes impatience, and Newtrace’s early years read like a list of things that had to be built because they could not be bought. Removing the membrane solved one problem and created several others: how to separate gases cleanly, how to detect oxygen contamination, how to shrink the footprint of a system that now relied on fluid dynamics instead of a physical barrier.

• Component gaps: the team had to develop its own oxygen detectors in-house because suitable sensors were not readily available domestically (Forbes India).
• Engineering workarounds: it built a proprietary bubble-collection method to reduce system size, a direct consequence of dropping the membrane (Forbes India).
• The revenue plateau: after starting to book operating revenue only in FY24, the company saw revenue slip from ₹3.7 crore (FY24) to ₹3.6 crore (FY25), even as spending rose (Inc42, MCA data).
• Widening losses: FY25 total expenses reached about ₹18.0 crore, up roughly 43% year on year, producing the ₹15.6 crore net loss (Inc42, MCA data).

None of that is unusual for a company still moving from proof-of-concept to commercial stacks; it is simply the unglamorous middle of a hardware journey, where the cheques flow out long before they flow in.

The turning point

The moment the bet started to look fundable was the 2023 seed round tied to Peak XV’s Surge programme. Newtrace joined the Surge 09 cohort and raised about $5.65 million (some reports cite $5.7 million), money that took it from laboratory validation toward pilot-scale hardware. On one side of that event was a company with a promising idea and hand-built parts; on the other was a company with capital to build automated systems and put a stack in front of a real refiner.

The proof point that followed carried the most weight: Bharat Petroleum began piloting Newtrace’s larger MARK-class system, and the ONGC Energy Centre was lined up as a next deployment. Reaching public-sector energy majors as pilot customers is the difference between a science project and a supplier, and it is what let the founders credibly talk about commercial deliveries. By early 2026 the company said it had deployed and secured cumulative orders worth around $300,000, a small number in absolute terms but a meaningful one for a first commercial toehold (Inc42, 2024).

The money behind it

Newtrace has raised roughly $12.95 million across four rounds, according to Inc42 and Tracxn, with no valuation publicly disclosed. The capital has come in two visible waves, each led by a different kind of backer.

• Seed, 2023: about $5.65 million, via Peak XV’s Surge 09 cohort, with Aavishkaar Capital, Speciale Invest, Micelio Fund and angels. This round funded the shift from lab to pilot hardware.
• Pre-Series A, March 2026: $6.3 million (₹56.93 crore, as reported by Inc42), announced around 10 March 2026, co-led by HDFC Bank and Mitsui Sumitomo Insurance Venture Capital (MSIVC).
• Returning backers: Aavishkaar Capital, Speciale Invest, Micelio Technology Fund and Peak XV’s Surge all participated again in the pre-Series A, alongside angels Manish Prataprai Gandhi and Renu Manish Gandhi.
• What each changed: Peak XV’s Surge gave early conviction and network; a strategic corporate lead like Mitsui Sumitomo signals interest from the insurance-and-industrial world; HDFC Bank’s participation brings domestic institutional weight to a hard-tech story.

The use of the 2026 money is telling: pilot-scale manufacturing, customer validation and supply agreements, and expanding engineering and manufacturing capacity, with initial commercial deliveries of its electrodes expected within roughly 12 months of the round (Inc42, March 2026). Vishesh Rajaram of Speciale Invest sits on the board as a nominee director (Tofler).

How it makes money

Newtrace’s model is capital-equipment sales, not a subscription or per-kilogram fee: it builds and sells electrolyser systems, with the pitch that a lower up-front machine cost and cheaper materials translate into cheaper hydrogen over the asset’s life.

• Revenue in: sale of electrolyser systems to industrial buyers; each system is reported to cost between ₹1 crore and ₹3 crore depending on size (Inc42, 2024).
• The cost claim: about $1,000 per kW for its stacks versus roughly $1,200 to $3,000 per kW for traditional electrolysers, the basis of its “up to 60% cheaper” hydrogen argument (Inc42, 2024).
• Where the margin should sit: eliminating the membrane and rare-earth-dependent parts, and using locally sourced materials, is meant to lower both the bill of materials and import exposure (Forbes India; YourStory).
• The part people get wrong: the headline “60% cheaper” is a company-stated projection at pilot scale, and an earlier 2022 account cited a more modest 30% manufacturing-cost reduction, so the true figure is still being established, not settled.
• Costs out: as a hardware firm, spending is dominated by R&D, engineering talent and building physical systems, which is why expenses (₹18.0 crore in FY25) dwarf revenue.

The numbers

The financials are those of an early deep-tech company: small, lumpy revenue against heavy investment. Figures are from MCA filings as surfaced by Inc42; FY23 predates meaningful operating revenue, which the company says began in FY24.

• Revenue fell 2.9% year on year, from ₹3.7 crore (FY24) to ₹3.6 crore (FY25).
• FY25 net loss: ₹15.6 crore, on total expenses of about ₹18.0 crore (up ~43% YoY).
• FY25 total assets: about ₹34.2 crore, down roughly 25% year on year as the company spent down capital.
• Capital structure: authorised capital ₹10 lakh and paid-up capital about ₹1.75 lakh (Tofler), with value held in preference/premium instruments typical of venture funding.

Where the money comes from

For now, almost all of Newtrace’s revenue comes from a narrow base: a few pilot and early commercial systems sold to industrial and public-sector energy buyers in India. There is no consumer segment and no geographic spread to speak of yet; this is concentrated, project-by-project income.

• By customer type: public-sector energy majors dominate the early pipeline, with Bharat Petroleum piloting a larger system and the ONGC Energy Centre named for a next deployment (Inc42, 2024).
• By stage: cumulative deployed and secured orders were around $300,000 as of the 2024 account, i.e. a handful of systems, not a book of recurring contracts.
• The surprise: despite the “green” framing, the near-term demand is industrial decarbonisation, refining, ammonia, steel and cement, not hydrogen cars; the founders explicitly deprioritise mobility.
• Talks in progress: Newtrace has said it is in discussions with large players such as Reliance Industries and Larsen & Toubro, which are potential customers and competitors at once (news reports, 2026).

The risks

• Cash-burn and dependence on fundraising: a ₹15.6 crore FY25 loss against ₹3.6 crore of revenue means the company runs on investor capital. If the next round is delayed or priced down, the roadmap from pilots to megawatt-scale systems stalls, because hardware scale-up cannot be done cheaply.
• Unproven cost claim at scale: the “up to 60% cheaper” figure is company-stated and demonstrated at pilot scale. Membrane-free electrolysis is genuinely novel, but novelty cuts both ways: efficiency, durability and gas-purity must hold across thousands of hours in an industrial plant, and the earlier 2022 claim of a 30% cost reduction shows the number is a moving target.
• Competition with far deeper pockets: Reliance, Adani and L&T are all building electrolyser capacity, and they can subsidise price and absorb losses in ways a venture-funded startup cannot. Newtrace’s edge has to be technical and defensible, not merely cheaper for now.
• Policy and demand timing: the entire green-hydrogen market leans on the National Green Hydrogen Mission (₹19,744 crore, targeting at least 5 million tonnes a year by 2030) and on customers actually converting from cheaper grey hydrogen. Slow adoption, long two-to-three-month deployment cycles and lumpy orders all show up directly as flat revenue, as FY25 already did.

The takeaway

Newtrace is a clean case study in what it costs to change a component, not just a company. The transferable lesson is that in hard tech, revenue is a lagging indicator and the real asset is the thing you can build that others cannot buy. A membrane-free electrolyser, in-house oxygen sensing, a bubble-collection design: each was forced by a gap, and each is now part of a moat. The financials look alarming in isolation, ₹3.6 crore of sales, ₹15.6 crore of loss, but read against a $6.3 million round and named refinery pilots, they describe a company still in the expensive act of proving a physics bet. It will be judged not on this year’s revenue line, but on whether its stacks run cheaply and reliably at a megawatt. That verdict is still out.

Frequently asked questions

What does Newtrace actually make?

Newtrace builds electrolysers, machines that split water into hydrogen and oxygen using electricity, for on-site green-hydrogen production by industrial customers. Its distinguishing design is membrane-free: it removes the ion-exchange membrane used in conventional electrolysers and uses the flow of water to keep the gases separate.

Who founded Newtrace and when?

It was co-founded by Prasanta Sarkar (CEO) and Rochan Sinha, who met through Entrepreneur First around 2020. The company, Newtrace Private Limited, was incorporated on 13 October 2021 in Bengaluru, Karnataka.

How much money has Newtrace raised?

About $12.95 million across four rounds, per Inc42 and Tracxn. That includes a roughly $5.65 million seed in 2023 via Peak XV’s Surge and a $6.3 million pre-Series A in March 2026 co-led by HDFC Bank and Mitsui Sumitomo Insurance Venture Capital. No valuation has been publicly disclosed.

Is Newtrace profitable?

No. In FY25 it reported revenue of ₹3.6 crore (down 2.9% from ₹3.7 crore in FY24) and a net loss of ₹15.6 crore, on total expenses of about ₹18.0 crore, according to MCA data reported by Inc42. Heavy losses are typical for a deep-tech hardware company at the pilot-to-commercial stage.

Who are Newtrace’s customers?

Its early customers are industrial and public-sector energy buyers. Bharat Petroleum has been piloting one of its larger systems and the ONGC Energy Centre has been named for a next deployment; the company has also said it is in talks with players such as Reliance Industries and Larsen & Toubro.

Sources

Figures are as of September 2026. Currency converted at $1 ≈ ₹96.0 as of 18 September 2026 (Trading Economics).

• Inc42, “Newtrace Raises $6.3 Mn To Commercialise Green Hydrogen Tech” — March 2026
• Inc42, “Can Newtrace Turbocharge India’s Push For Green Hydrogen Dominance?” — 2024
• Inc42, Newtrace company financials page — 2026
• Forbes India, “Newtrace Energy: Building deeptech for green hydrogen” — 2024
• YourStory, “Efficient energy: Newtrace is making production of green hydrogen cheaper” — July 2022
• Tofler, Newtrace Private Limited company profile (CIN U31900KA2021PTC153080) — 2026
• ZaubaCorp, Newtrace Private Limited registry record — 2026
• Tracxn, Newtrace company and legal-entity profiles — 2026
• Analytics India Magazine / SolarQuarter / BioEnergy Times, coverage of the $6.3 Mn pre-Series A — March 2026

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